Important message for 2013 Self-employment tax

The U.S. federal tax law reverts the total self-employment tax rate to the normal rate of 15.3% for 2013, with the Social Security tax rate of 12.4% up to the earnings of $113,700 and the Medicare tax portion of 2.9% on the earnings without any limit.

For U.S. staff members' share, effective from 2013, the rate of social security portion of the self-employment tax will be back to normal i.e. 6.2 %. The maximum wages and earnings subjected to social security tax are at $113,700 for 2013. The rate of the Medicare portion of the self-employment tax remains at 1.45% and there is no limitation on the wages and earnings subjected to Medicare tax.

Also, staff members be aware that a 0.9% additional Medicare Tax applies, if wages/compensation exceeds $125,000 for Filing status of Married Filing Separate, $200,000 for Filing status of Single or Head of Household or Qualifying Widow(er), $250,000 for Filing status of Married Filing Joint. You may want to include this additional Medicare Tax along with the estimated tax payment. Also, please note that this additional Medicare Tax is applicable for Employee's share only and there is no employer (UN) match.

Staff members may refer to the “U.N. employee's share of self-employment tax calculation worksheet” available here on this webpage to assist them in calculating their share of the self-employment tax for 2013.